Why do economists predict that oil prices will increase or decrease?

Question

Some economists think the price of gas will be $7.00 per gallon by 2010 and others think the price will be $2.50. Why are their predictions different?

If nobody knows what the price of gas will be by the year 2010 then why do experts predict prices?

Answer 1

After Hitler came to power and showed the world how easily it is to turn lies into truth in the minds of people, lets just say the economists caught on.

Answer 2

New oil reserves wil lower prices while new econimic strains and shortage of oil in places like Suadi Arabia and rebels in Nigeria will increase the amount. Also, the war in iraq is taking a toll on the oil reserves.

Answer 3

revolution of truth: "shortage of oil in places like Suadi Arabia"

i live in saudi arabia. u have no idea what ur talking about... don't believe everything u hear on the news. saudi has oil reserves BEYOND imagination. and the US government knows this.

but what better way to drive oil prices up than declare a shortage from THE biggest oil supplier? oh and did u know that the US government just finalized an agreement to buy oil from Saudi Arabia at a fixed price of $140? in terms of pure investment theory, why would u do that unless ur expecting a definite rise in prices?

FYI - a figure of $180 or $190 by the beginning of 2009 is very probable.

Answer 4

I think the higher number is closer...peak production has almost been met while demand is steadily rising....drilling is a longer term solution but still a band-aid

Answer 5

Cause there really are people manipulating our market. I read on the website www.prisonplanet.com that it won't go above $5/gallon, at least not YET, because we cut our consumption "too much".

Also, some increases are also directly tied to our falling dollar overseas, another reason we need to DRILL HERE NOW.

Answer 6

Becuse it's really all guess work

Answer 7

Because a prediction gives us something to look forward to and expect for the future as opposed to just going into it unknowingly.

similar situation here: when you apply for a job, you ask questions about the position so you know what you're getting into. same with gas price estimations: lack of knowledge is frightening to people in this day and age so we give estimates to comfort society. :)

Answer 8

they have to predict prices in order to know which are the investments that they have to do. they can not for example if they want to build a factory to count the materials with the existing price because that will be a disaster for them and the job will not finish.

Answer 9

to make money off specualtion

Answer 10

Actually, Robert, they don't know. Nobody does. Experts study trends, such as supply, demand, political situations in various nations, military crisis, the global economy etc. Sadly, some "experts" bring their political and environmental points of view into the equation. Others go for the notoriety, the fame. Who knows whether in 2010 there will be much bigger global problems than the price of oil?

Answer 11

Each economist predict differently because most of their predictions are based on where petrolium will be found or who will be in control of it. Since they predict different things, they get different price ranges.

Answer 12

They predict prices for preparation. And they're different because some economists are optimists (people who see the glass half full) and pessimists (people who see the glass half empty)

Answer 13

Why do you care what "some" economists say, when none of them are ever right about anything?

An economist has as much likelihood to predict the future of the economy as a sports announcer has in predicting the outcome of a ball game.